The Australian Tax Office says it's cracking down on 'other' work-related expenses this year

The Australian Tax Office has warned it will focus on the record $7.9 billion claimed by 6.7 million taxpayers last year – nearly $1,179 each – as deductions for “other work-related expenses”.

“Other work-related expenses” can include deductions such as a home office, union fees, mobile phone and internet, overtime meals and tools and equipment.

Assistant commissioner Kath Anderson said the total claimed was “a significant amount of money”, and for those expenses to be deductible, they have to meet three key criteria.

“Firstly, you must have paid for it and not been reimbursed; secondly, it must be directly related to earning your income and not a private expense; and thirdly, you must have a record to prove it,” she said.

“Many taxpayers make legitimate claims, but we are also seeing errors in some claims, and some taxpayers are making risky or outright false claims”.

As a result, the ATO says its key focus will be on substantiating any claims.

“It’s important that you have a record of the expense and can demonstrate how you calculated your claims,” Anderson said.

“Every year we disallow lots of claims because there is no evidence to prove the expense. Yet it’s so easy to keep an electronic record.”

And when work and pleasure mix, Anderson says it’s important that you only claim for the work-related part.

“We are seeing quite a few examples of people trying to claim the whole expense, including the private portion. Like some who incorrectly claim their entire phone and internet bundle, and others who claim an overseas study trip even though they had a holiday as part of the trip.”

The tax boss says the ATO’s analytics results in red flags that saw them contact 1 million taxpayers about corrections involving work-related expenses, resulting in $100 million worth of adjustments.

Anderson advises using the ATO’s app, myDeductions, to enter and save expenses during the year, which can then be uploaded to a myTax return or given to a tax agent.